REPORT TO COUNCIL
SUBJECT
Title
Award of Contract for Voice Over Internet Protocol Equipment to Replace the Citywide Telephone System (F14-92)
Report
REPORT IN BRIEF
Approval is requested to award a contract to AMS.Net, Inc. of Livermore, in the amount of $731,375 to implement a Voice Over Internet Protocol (VoIP or Voice Over IP) telephone system. Approval is also requested for a 10% contingency in the amount of $73,138.
The recommended contract includes equipment and professional services to replace the existing phone and voicemail systems, handsets, and related network components, and one year of system maintenance and support.
ENVIRONMENTAL REVIEW
N/A.
BACKGROUND AND DISCUSSION
The City's current telephone system was implemented in the early 1990s and, although still usable, has inherent limitations with respect to functionality, scalability and redundancy to guard against failure. The current system's limited functionality reduces the effectiveness of the technology in an increasingly technology-dependent work environment. The system itself, and associated parts, are no longer manufactured. Vendor support is difficult to obtain and is becoming expensive to procure. These factors are problematic for staff in maintaining stable and reliable 24/7 operations.
The existing phone system is an Avaya Definity PBX, supporting approximately 800 digital lines, 50 FAX and other analog lines, and 5 off-premise extensions (OPX) serving over thirty buildings within the City's borders. A majority of City employees are located in three facilities: the City Hall campus including Public Safety, the Community Center, and the Corporation Yard. An Audix system provides voicemail coverage for a large percentage of these phone lines. The telephone sets in use are single and multi-line digital phones with typical digital PBX functionality including line selection, placing a call on hold, transferring calls, etc.
A Request for Proposals (RFP) process was utilized to facilitate replacement of the current system. Specifications were prepared by the Information Technology Department (ITD), and Purchasing staff issued RFP No. F14-92 in July 2014. The RFP was broadcast to potential suppliers through the City's Onvia Demandstar public procurement network. Twenty-five firms requested the RFP documents. Seven proposals were received on August 27, as follows:
Proposing Firm |
Five-year Proposed Cost* |
8X8 Inc., San Jose, CA |
$222,438 |
Advantel Networks, San Jose, CA |
$721,611 |
AMS.Net, Livermore, CA |
$835,669 |
Development Group, Redding, CA |
$731,336 |
Jive Communications Inc., Orem UT |
$1,306,326 |
NetExperts, San Ramon, CA |
$760,780 |
Nexus IS, Pleasanton, CA |
$771,095 |
*As a standard practice for these types of solutions, the RFP required that the cost proposals include one-time implementation costs and ongoing maintenance/support costs for years two through five.
Two proposing firms, 8X8 and Jive Communications, were deemed non-responsive because their solutions would not be capable of voice communications within City buildings during Internet outages, which often occur during disasters. In addition, 8X8 proposed a fraction of the equipment needed by the City at startup. Another firm, Development Group, did not provide all of the required pricing elements, so an accurate total cost could not be determined (their overall proposal was lacking in other important detail as well). Among the remaining firms, AMS.Net (AMS) offered the most comprehensive solution, provided a well-articulated implementation plan, and were deemed by the evaluation team to be the most highly-qualified.
Subsequent scope and cost discussions were held to clarify system functionality and product requirements, at which point it was determined that additional equipment (and associated labor and system support) was necessary, increasing the one-time costs by approximately $142,000. This includes addition of a "voice gateway" to enable communications over Internet Protocols for approximately $28,000 (which could not be defined until a decision was made on which VoIP system the City was going to select); approximately $18,000 in service costs to reconfigure switches to prioritize the routing of voice transmissions over data packets; different handsets and conference phones other than those proposed by the vendor, based on refined user preferences, for approximately $78,000; and $18,000 for end-user phone configuration/usage support for the first year to bridge the "knowledge gap" between the vendor and City staff.
Conversely, the City removed from the proposal $245,268 (or $61,317 annually) in ongoing maintenance and support costs for years two through five, having determined savings could be achieved by separately bidding the service.
FISCAL IMPACT
The total cost of the contract, including equipment, sales tax, labor and one year of system support is $731,375. After the first year support period, an annual contract for maintenance and support will be competitively bid and issued under the City Manager's award authority. Annual maintenance and support costs are anticipated to be substantially lower than the $61,317 proposed by AMS. Budgeted funds for the system replacement and ongoing maintenance and support are available in the Information Technology Department Equipment Replacement Account.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
1) Award a contract to AMS.Net in the amount of $731,375, in substantially the same form as the Draft Purchase Order and associated Implementation Agreement attached to the report; and 2) approve a 10% contract contingency in the amount of $73,138.
Staff
Prepared by: Pete Gonda, Purchasing Officer
Reviewed by: Grace K. Leung, Director, Finance
Reviewed by: David Jensen, Director, Information Technology
Reviewed by: Robert A. Walker, Assistant City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Project Cost Summary
2. Draft Purchase Order and Implementation Agreement